Founded in 1964 with one store in New Orleans, Sally’s Beauty Supply has grown to be the world’s largest retailer of professional beauty supplies. Specializing in well-known as well as hard to find products, Sally’s carries over 6,000 products for hair, skin, and nails and are available to retail customers and salon professionals in over 2,700 store locations throughout the United States and internationally. Sally’s Beauty Supply came of age in the era of small neighborhood beauty salons, and although it has never been associated with haute couture, it has been the mainstay for small businesses, students, and especially do-it-yourselfers who are happy to pay less money for knock-off brands that, in the eyes of many consumers, achieve the same result. Although the name alone suggests that Sally’s is far from trendy, it has recently incorporated new features in its sales strategies to access younger and computer-/Internet-savvy customers. Sally’s has added both a Facebook page and Twitter sites that keep customers apprised of sales, and sites where they can download additional savings coupons. Its sales strategy appears to be working as more customers join the Beauty Club and are thereby encouraged to visit the stores more frequently.
History and Holdings
Headquartered in Denton, Texas, Sally’s has grown dramatically and steadily since the late 1960s through acquisitions of other national and international beauty supply enterprises. Sally’s Beauty Holdings comprises Sally’s Beauty Supply, the retail portion, and Beauty Systems Group, which sells 9,500 professionally branded products targeted exclusively for professional and salon use. The combined holdings sell and distribute to over 3,300 stores, including 170 franchise units. Beauty Systems Group began aggressive acquisitions of other businesses in 1985, and its portion of the holdings comprises approximately 825 stores throughout most of the United States and Canada. Sally’s Beauty Holdings is a freestanding company traded on the New York Stock Exchange (SBH).
Sally’s Beauty Supply has gained a large share of the distribution market. Besides its 2,200 stores in the 48 contiguous states, it owns 9 stores in Canada, 180 stores in the United Kingdom and Ireland, 25 in Germany, 30 in Japan, and 40 in Mexico. In addition, in 2008 they acquired 40 stores in Belgium, France, and Spain, giving the company a foothold in Western Europe.
The recent U.S. and worldwide recession has affected Sally’s Beauty Holdings, yet the company has remained strong enough to continue paying its acquisitions debt and plans to continue opening more stores. While direct-to-salon sales have dropped modestly, 4.1 percent in the third quarter of 2009, the holdings company has posted a 7 percent profit. A significant portion of this profit is due to a
3.2 percent increase in Sally’s Beauty Supply store sales. This increase is attributed to the accessibility of its generic beauty brands and the use of do-it-yourself products by many of its customers in preference to visiting salons for more expensive beauty treatments. Gross profits continue to rise but are being offset by the cost of acquisitions, hovering in the $1.2 billion range, while total revenue for the holdings remains close to double that amount.
Commerce and e-Commerce
Through its acquisitions and opening of new locations, Sally’s Beauty Supply stores are readily located in many medium-sized and larger cities. Easily accessed through both online locator sites and Sally’s own Web site, store locations are by company policy open seven days a week and for extended hours, to enable shopping by all sectors of customers and especially those who work full-time. The company offers loyalty incentive plans through Beauty Club Cards for its nonprofessional clients and a Sally ProCard for its professional customers with discounts on items throughout the stores.
Publicized through SallyBeauty magazine, launched in 2000, and its Web site (www.sallybeauty.com), launched in 2001, Sally’s targets three customer areas: the working beauty professional, the beauty school student, and the general consumer.
Created in 1996, SallyCares endeavors to provide personal care assistance and guidance to women in need. SallyCares is divided into four areas of focus; the SallyCares Shelter program focuses on aiding over 50 women’s domestic abuse shelters nationwide through donations of grooming and beauty products, and through monetary contributions through the SallyCares Anniversary Fund. Breast cancer research is the focus of the second endeavor; launched in 1991, the City of Hope canister fundraising campaign and the annual gala have to date contributed over $3 million to breast cancer research. The two other foci—SallyCares Seminars and the funding of 10 National Cosmetology Association scholarships, demonstrate the company’s policy of career building and education for future professionals. In recent years, the holding company has contributed scholarship donations to the University of North Texas and grants to Texas Women’s University, furthering the company’s goals of encouraging women’s careers. The benefits for Sally’s employees are four major areas of insurance coverage, time off earned in the first year of employment (three weeks), paid holidays, tuition reimbursement, and 401(k) with company matching contributions.